Correlation Between PJ Metal and Haesung Industrial
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Haesung Industrial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PJ Metal and Haesung Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PJ Metal Co and Haesung Industrial Co, you can compare the effects of market volatilities on PJ Metal and Haesung Industrial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PJ Metal with a short position of Haesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Haesung Industrial.
Diversification Opportunities for PJ Metal and Haesung Industrial
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 128660 and Haesung is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Haesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung Industrial and PJ Metal is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PJ Metal Co are associated (or correlated) with Haesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung Industrial has no effect on the direction of PJ Metal i.e., PJ Metal and Haesung Industrial go up and down completely randomly.
Pair Corralation between PJ Metal and Haesung Industrial
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 1.31 times more return on investment than Haesung Industrial. However, PJ Metal is 1.31 times more volatile than Haesung Industrial Co. It trades about -0.09 of its potential returns per unit of risk. Haesung Industrial Co is currently generating about -0.21 per unit of risk. If you would invest 336,500 in PJ Metal Co on September 21, 2024 and sell it today you would lose (35,000) from holding PJ Metal Co or give up 10.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
PJ Metal Co vs. Haesung Industrial Co
Performance |
Timeline |
PJ Metal |
Haesung Industrial |
PJ Metal and Haesung Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PJ Metal and Haesung Industrial
The main advantage of trading using opposite PJ Metal and Haesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Haesung Industrial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Haesung Industrial will offset losses from the drop in Haesung Industrial's long position.PJ Metal vs. Lotte Non Life Insurance | PJ Metal vs. Jeju Semiconductor Corp | PJ Metal vs. Hannong Chemicals | PJ Metal vs. DataSolution |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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